AI Demand Drives Wiley's First Quarter 2026 Results

Wiley (NYSE:WLY), a leading global provider of authoritative content, data-driven insights, and knowledge services for the advancement of science and learning, today reported results for the first quarter ended July 31, 2025.

FIRST QUARTER SUMMARY

• GAAP performance vs. prior year: Revenue of $397 million vs. $404 million due to foregone revenue from divested businesses, Operating Income of $31 million up 7%, and Diluted Earnings Per Share (EPS) of $0.22 vs. (-$0.03) in prior year
• Adjusted Results at constant currency in line with expectations: Adjusted Revenue of $397 million up 1%, Adjusted Operating Income of $34 million down 2%, Adjusted EBITDA of $70 million down 3%, and Adjusted EPS of $0.49 up 2%
• Growth in Research revenue (+5% at constant currency) driven by AI licensing projects and open access growth offsetting timing of prior year journal renewals
• Executed landmark AI licensing project with large tech company on behalf of Wiley publisher partners; announced strategic partnership with Anthropic to accelerate AI integration across scholarly research
• Increased dividend for the 32^nd consecutive year and share repurchases to $14 million; Board approved $250 million share repurchase authorization, a 25% increase over its 2020 authorization

MANAGEMENT COMMENTARY

"We continue to see strong demand trends in research as we open up new growth pathways in AI and corporate R&D," said Matthew Kissner, President and CEO. "Wiley is now a recognized leader in AI licensing and innovation, executing projects for multi-national corporations and strategically partnering with top AI innovators. At the same time, we continue to drive operational excellence across the organization, reaching important milestones in our multi-stage research publishing platform launch and expanding AI innovation across our product portfolio. Given leading indicators, the strength of our recurring revenue models and open access programs, and anticipated cost savings, we remain fully confident in our Fiscal 2026 outlook."

FINANCIAL SUMMARY

Please see accompanying financial tables for more detail.

Research

• Q1 Research revenue of $282 million was up 6% as reported and 5% at constant currency driven by AI licensing revenue of $16 million (vs. $1 million in prior year period) and open access growth offsetting an unfavorable comparison to prior year due to the timing of journal renewals, as well as softness in ancillary material. Wiley continues to see strong demand to publish with article submissions and output growing by 25% and 13%, respectively, with robust growth across all key geographies. Note, it takes approximately six months for a submitted article to be published.
• Q1 Adjusted EBITDA of $80 million was up 2% as reported and at constant currency due to revenue growth partially offset by AI mix (higher royalties for the partner portion of the AI licensing agreement) and the timing of costs. Adjusted EBITDA margin for the quarter was 28.3% vs. 29.3% in the prior year period.

Learning

• Q1 Learning revenue of $115 million was down 7% as reported and 8% at constant currency largely due to $16 million of AI licensing revenue in the prior year (vs. $13 million this quarter) and market-related softness in Professional.
• Q1 Adjusted EBITDA of $31 million for the quarter was down 7% as reported and at constant currency due to lower revenue. Adjusted EBITDA margin was 27.4%, up slightly over prior year.

Corporate Expenses

"Corporate Expenses" are the portion of shared services costs not allocated to segments.

• Q1 Corporate Expenses rose 4% on an Adjusted EBITDA basis at constant currency driven primarily by costs related to strategic consulting projects (now complete), enterprise modernization, and other one-time items. Wiley expects Corporate Expenses to decline starting in Q2 as cost savings ramp up.

EPS

• GAAP EPS of $0.22 compared to a ($0.03) loss in the prior year period, which was impacted by a $0.33/share, non-cash income tax adjustment.
• Adjusted EPS of $0.49 was up 2% at constant currency mainly due to lower interest expense from lower rates.

BALANCE SHEET, CASH FLOW, AND CAPITAL ALLOCATION

• Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at quarter end was 1.9 compared to 2.0 in the year-ago period.
• Net Cash Used in Operating Activities was $85 million compared to $89 million in the prior year period. Note, Wiley's regular use of cash in the first half of the fiscal year is driven by the timing of cash collections for annual journal renewals, which are concentrated in Q3 and Q4.
• Free Cash Flow less Product Development Spending was a use of $100 million compared to a use of $107 million in the prior year. Capex was $15 million compared to $18 million.
• Returns to Shareholders: Wiley allocated $32 million toward dividends and repurchases this quarter, up approximately $1 million from the prior year period. In Q1, the Company acquired approximately 332,000 shares at an average cost of $42.22/share and raised its dividend for the 32nd consecutive year. In June, the Wiley Board of Directors approved a $250 million share repurchase authorization, a 25% increase over its 2020 authorization.
• Divestiture Proceeds: During the quarter, Wiley received approximately $120 million in cash proceeds related to the University Services divestiture, with the total outstanding note paid in full. Wiley has utilized these proceeds to further reduce its debt.

FISCAL 2026 OUTLOOK

Based on leading demand and output indicators, the success of calendar year 2025 journal renewals, and anticipated cost savings, Wiley is reaffirming its full year outlook.

Note, growth outlook is comprehensive and includes adverse variances, including AI revenue in Fiscal 2025. Adjusted metrics exclude impact of divestitures, which were primarily completed in Fiscal 2024 with remainder completed in first half of Fiscal 2025. Approximately $17 million of divestiture-related revenue was recorded in Fiscal 2025.

EARNINGS CONFERENCE CALL

Scheduled for today, September 4 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at http://events.q4inc.com/attendee/819546756. U.S. callers, please dial (888) 210-3346 and enter the participant code 2521217#. International callers, please dial (646) 960-0253 and enter the participant code 2521217#.

ABOUT WILEY

Wiley (NYSE:WLY) is a leading global provider of authoritative content, data-driven insights, and knowledge services that advance science and learning. For over 200 years, we've empowered researchers, learners and institutions worldwide to drive progress and solve the world's most pressing challenges.

Learn more at Wiley.com and Investors.Wiley.com. Follow us on Facebook, X, LinkedIn and Instagram.

NON-GAAP FINANCIAL MEASURES

Wiley provides non-GAAP financial measures and performance results such as "Adjusted EPS," "Adjusted Operating Income and Margin," "Adjusted EBITDA and Margin," "Adjusted Income before Taxes," "Adjusted Income Tax Provision," "Adjusted Effective Income Tax Rate," "Free Cash Flow less Product Development Spending," "Adjusted Revenue," and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of divestitures and acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information. We have not provided our 2026 outlook for the most directly comparable U.S. GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with U.S. GAAP.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the ability to realize operating savings over time and in fiscal year 2026 in connection with our multiyear Global Restructuring Program and completed dispositions; (xi) cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business; (xii) as a result of acquisitions, we have and may record a significant amount of goodwill and other identifiable intangible assets and we may never realize the full carrying value of these assets; (xiii) our ability to leverage artificial intelligence technologies in our products and services, including generative artificial intelligence, large language models, machine learning, and other artificial intelligence tools; and (xiv) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise forward-looking statements to reflect subsequent events.

CATEGORY: EARNINGS RELEASES

JOHN WILEY & SONS, INC.

EXPLANATION OF USAGE OF NON-GAAP PERFORMANCE MEASURES

In this earnings release and supplemental information, management may present the following non-GAAP performance measures:

• Adjusted Earnings Per Share (Adjusted EPS);
• Free Cash Flow less Product Development Spending;
• Adjusted Revenue;
• Adjusted Operating Income and margin;
• Adjusted Income Before Taxes;
• Adjusted Income Tax Provision;
• Adjusted Effective Tax Rate;
• EBITDA, Adjusted EBITDA and margin; and
• Results on a constant currency basis.

Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well as for internal reporting and forecasting purposes, when publicly providing our outlook, to evaluate our performance and calculate incentive compensation.

We present these non-GAAP performance measures in addition to US GAAP financial results because we believe that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose.

The performance metric used by our chief operating decision maker to evaluate performance of our reportable segments is Adjusted Operating Income. We present both Adjusted Operating Income and Adjusted EBITDA for each of our reportable segments as we believe Adjusted EBITDA provides additional useful information to certain investors and financial analysts for operational trends and comparisons over time. It removes the impact of depreciation and amortization expense, as well as presents a consistent basis to evaluate operating profitability and compare our financial performance to that of our peer companies and competitors.

For example:

• Adjusted EPS, Adjusted Revenue, Adjusted Operating Income and margin, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, EBITDA, and Adjusted EBITDA and margin provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance.
• Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends, and fund share repurchases and acquisitions.
• Results on a constant currency basis remove distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at constant currency), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.

In addition, we have historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing our operating margins and net income, and in comparing our financial performance to that of our peer companies and competitors. Based on interactions with investors, we also believe that our non-GAAP performance measures are regarded as useful to our investors as supplemental to our US GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures.

We have not provided our 2026 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.

Non-GAAP performance measures do not have standardized meanings prescribed by US GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under US GAAP. The adjusted metrics have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, US GAAP information. It does not purport to represent any similarly titled US GAAP information and is not an indicator of our performance under US GAAP. Non-GAAP financial metrics that we present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-GAAP measures.

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Brian Campbell

Investor Relations

[email protected]

201.748.6874